Good morning, it's Olivia Grant from UKPulse, bringing you the latest on what's happening with your money. The big news this month is that the Bank of England has held its base rate, a decision that has a direct ripple effect on mortgage and savings products across the country.
What changed and by how much?
The Bank of England's Monetary Policy Committee decided to keep the base rate at its current level. This means there hasn't been an immediate shift in the underlying cost of borrowing for banks, which tends to translate into more stable, rather than rapidly changing, mortgage rates for consumers.
For homeowners, this stability can be a mixed blessing. Those on variable-rate mortgages won't see an immediate increase in their payments, which is a relief. However, it also means that the significant drops in mortgage rates some might have hoped for haven't materialised.
On the flip side, for savers, a held base rate often means savings rates also remain steady. While this prevents cuts, it might not offer the boost some were hoping for to combat the cost of living.
Looking at the market, which.co.uk reported that Nationwide and Lloyds were the cheapest mortgage lenders in April. This gives a strong indication of where competitive deals might be found as we move through May 2026. If you're looking to remortgage or buy, these lenders could be a good starting point for your research.
In other news impacting the banking sector, Santander has completed its takeover of TSB. If you were a TSB customer, particularly with a mortgage, it's worth understanding what this means for your existing products and any future options.
Scenario: Remortgaging or Buying Your First Home
Let's say you're a homeowner with a £200,000 mortgage coming to the end of a fixed term, or a first-time buyer looking for a £200,000 loan. With the base rate held, lenders like Nationwide and Lloyds, who were competitive in April, might still offer some of the best rates.
For a first-time buyer, saving for that deposit is crucial. If you're under 40, a Lifetime ISA (LISA) is a powerful tool. You can contribute up to £4,000 each tax year and the government adds a 25% bonus, meaning you get £1,000 free for every £4,000 saved annually. This bonus significantly boosts your deposit fund. Any additional savings could go into a Cash ISA for tax-free growth, or a standard savings account, keeping in mind your Personal Savings Allowance (PSA) for any interest earned.
For homeowners looking to remortgage, even a small difference in interest rate can save thousands over the life of the loan. For example, on a £200,000 mortgage, a 0.5% difference in interest rate could mean saving hundreds of pounds a year.
What this means for you
Whether you're a homeowner or a renter saving for a deposit, the stable base rate means it's a good time to review your current financial products and explore what's available. Don't assume your current deal is the best, especially if your fixed-term mortgage is ending soon.
Step-by-step what to do right now
- Check your current mortgage: Note your interest rate, remaining term, and when any fixed or tracker deal ends.
- Review your savings: Are you maximising your tax-free allowances with a LISA (if eligible) or Cash ISA? Check if your savings rate is variable or includes a temporary bonus that might expire.
- Compare the market: Use online comparison tools to see what rates are currently on offer from various lenders, paying close attention to those like Nationwide and Lloyds who have recently been competitive.
- Consider a mortgage broker: They have access to a wider range of deals and can offer personalised advice.
- Understand the Santander/TSB changes: If you were a TSB customer, ensure you understand any implications for your accounts.
When effective
The Bank of England's decision to hold the base rate is effective immediately. Mortgage and savings providers typically adjust their offerings in the days and weeks following such announcements, so current rates reflect this stability. Any new mortgage deals you secure will be effective from your completion or remortgage date.
Where to get help
For personalised mortgage guidance, it's always recommended to speak with an independent mortgage adviser. For general comparisons, reputable online comparison websites can provide a good overview of the market. Your bank or building society can also discuss their specific products with you.
But there are risks
While the base rate is currently held, economic conditions can change. Future Bank of England decisions could lead to rate increases or decreases, impacting both new mortgage deals and variable-rate products. House prices are also a topic of ongoing discussion, as highlighted by which.co.uk, and market conditions can influence lender appetite and criteria. Always factor in potential changes when making long-term financial plans.
Sources
- which.co.uk — Best mortgage rates & deals May 2026 (UK)
- which.co.uk — What's happening to house prices?
- which.co.uk — Santander completes takeover of TSB – what it means for you
- which.co.uk — Nationwide and Lloyds were the cheapest mortgage lenders in April
- which.co.uk — Base rate held: how will it impact mortgage and savings rates?
This is not financial advice. Seek independent mortgage guidance. Savings rates shown may be variable and include introductory bonuses. Interest may be taxable above your Personal Savings Allowance.